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But that is precisely because a lack of autonomous spending in the EU! One theory is that in Europe in the 1980s, workers became so much more empowered that th

But that is precisely because a lack of autonomous spending in the EU! One theory is that in Europe in the 1980s, workers became so much more empowered that the private sector lost the will to invest. Start with https://delong.typepad.com/kalecki43.pdf https://delong.typepad.com/kalecki43.pdf for the basic concept here, but there are many more examples. A VAT-funded balanced budget welfare state is a purely redistributional mechanism which, while great, is not sufficient to undo this sort of thing. Direct government spending like the military sort is a way around this. Maybe the workers are militant, but will the democracy just allow itself to decline military because you don't feel like dealing with that? Workers vote too, so I don't think so.

pasabagi 5y ago
I don't know. It seems to me that compared to every other form of state spending (roads, healthcare, etc), military spending is conspicuously poor in terms of return on investment. I think the US is a very weird state - it's probably the most consistently old-school liberal state in the world, it has negligible worker activism, colossal natural resources, and its position as world hegemon gives it all sorts of non-imitable economic advantages. I don't think you can copy the US if you're not the US - the closest in terms of economic policy is the UK, and the UK economy is kind of like a corpse in a bin bag.